TV Broadcasters Sue Over FCC Auction of Airwaves
Industry Group Says Changes Could Reduce Coverage Areas, Impose 'Repacking' Expenses
The National Association of Broadcasters filed a lawsuit on Monday arguing the Federal Communications Commission's plan to auction off airwaves next year would hurt TV stations in both their coverage areas and their wallets.
The FCC is planning to hold its first-ever spectrum reverse auction next year, where TV stations in large cities will take bids to give up their airwaves so they can be resold to wireless carriers to meet the exploding demand for mobile broadband. Stations that take part in the auction can either go out of business or move to another channel that uses fewer airwaves.
The NAB's lawsuit challenges the FCC's auction rules, arguing they don't go far enough to protect broadcasters that don't participate in the voluntary proceeding. The NAB has been adamant that stations that don't take part should not have their coverage area reduced, or be forced to pay out of pocket for the expense of moving their broadcast signal to a new frequency, a process called repacking.
"We've said from day one, if stations want to volunteer to go out of business, that's their prerogative. But for those stations that choose to remain in business, they should be held harmless," NAB spokesman Dennis Wharton said.
Due in part to the NAB's lobbying, Congress included language in the 2012 auction legislation that directed the FCC to take all reasonable efforts to preserve broadcasters' coverage areas, and to fully compensate stations for the costs of the moving process. The NAB's lawsuit filed Monday in the D.C. Circuit Court of Appeals challenges whether the FCC went far enough to preserve broadcasters' coverage areas, and argues that stations will still have to pay as much as $500 million out of pocket to cover their repacking expenses.
Should the NAB win in court, the FCC could be forced to redo its auction rules, or delay the auction while it work to address NAB's concerns.
Such lawsuits challenging FCC proceedings are common, and frequently resolved before the court has a chance to weigh in. A broadcast industry source said the FCC could potentially convince the NAB to drop its lawsuit by increasing the $1.75 billion set aside to compensate broadcasters for repacking, and making more of an effort to ensure that stations won't see their coverage areas significantly reduced.
"We are confident that the Report and Order fulfills the mandates established by Congress on this complex matter," an FCC spokesperson said via email.
The NAB denied that the lawsuit is an attempt to delay the auction, emphasizing that it has asked the court for an expedited review. Representatives for both the wireless industry and a coalition of TV stations that might participate in the auction expressed hope that the court would address NAB's concerns in time to avoid a delay to the auction, which is scheduled for mid-2015.
"While we would prefer to work together collaboratively to address NAB's concerns rather than resort to litigation, we are hopeful the court addresses these issues quickly and that the NAB adheres to its commitment for an expedited process without unnecessary delays," said Scott Bergmann, vice president for regulatory affairs for CTIA-The Wireless Association.
